Many people associate Robinhood with GameStop and other volatile stocks that have dominated the headlines this year. However, traders on the platform have positions in a huge range of companies, and some of the most commonly held stocks on Robinhood are backed by dependable businesses with favorable long-term outlooks.
Retail traders are more active in the market than ever before, and some companies widely favored by individual investors look poised to deliver impressive returns. Read on for a look at three popular Robinhood stocks that could help take your portfolio to the next level.
1. Walt Disney
Despite pandemic-related challenges, Walt Disney's (DIS 1.65%) stock has posted impressive performance over the last year thanks to the success of the Disney+ streaming platform. The company's share price has roughly doubled over the past year, and it looks like the entertainment giant is on track to continue delivering wins for investors.
Disney+ has gotten off to a fantastic start, and the entertainment giant now expects that the streaming platform will have somewhere between 230 million and 260 million subscribers by the end of 2024, up from the company's previous high-end target for 90 million paid subscribers. The pandemic actually helped Disney quickly scale its footprint in the streaming space, and rapid growth for Disney+ has made up for pandemic-related weakness in other segments.
COVID-19 has produced an exhausting series of twists and turns, and some degree of headwinds will likely continue to impact Disney's parks and theatrical films segments through at least the next year. However, there are signs that the economy is starting to bounce back, and eventually the world should be able to return much closer to normal -- paving the way for comebacks in these segments. Disney stands out as an attractive pandemic-recovery stock.
The company has successfully cleared the hurdle of updating its entertainment strategy for the streaming age, and its classic lineup of characters and franchises should help the business continue delivering wins across multiple segments. Robinhood traders might have a reputation for being heavily involved in short-term trading, but it looks like many are taking the long view on Disney.
AT&T (T 0.25%) might be about as far away from the traditional conception of a "Robinhood stock" as you can get. The telecom giant has posted meager sales and earnings growth in recent years, and its business looks less than exciting in many respects. Competition in the mobile wireless space is depressing pricing power, the company's DIRECTV subsidiary will continue losing subscribers, and its acquisition of Time Warner hasn't been able to provide the growth that many investors were anticipating.
However, AT&T is actually quite popular among traders on Robinhood's platform, and there's a strong bullish case for the stock at current prices. The company is valued at less than 10 times this year's expected earnings, it pays a dividend yielding roughly 6.8%, and it may have some underappreciated avenues to growth.
Netflix and Disney are currently the talk of the town in the streaming market, but Warner has an impressive content library and proven production studios and marketing teams, and it should be able to drive growth for its HBO Max streaming service. Having a capable entertainment wing could also prove to be an asset in the developing 5G race.
5G should create opportunities for AT&T to grow its mobile wireless business in both its consumer and enterprise segments. Strength in content and media distribution channels probably won't be a big draw for most enterprise customers, but service bundling and other promotions could be a sticking point at the consumer level. Interplay between its mobile wireless and media businesses could also be a big asset for the company's digital advertising ventures.
With shares looking cheaply priced and packing a big dividend yield, AT&T is a value stock that could far surpass current expectations.
Zynga (ZNGA 4.86%) is a video game publisher best known for franchises including Farmville, Zynga Poker, and Words with Friends. However, the company has dramatically expanded its catalog of gaming properties and development studios through an acquisition push that has stretched through the last decade and accelerated in recent years.
Zynga's big string of purchases has helped make it the United States' largest mobile video games publisher by revenue. Solid performance for some legacy franchises and strong contributions from titles added to its library through acquisitions helped boost bookings by 61% year over year in the fourth quarter, and it looks like the company is on track to continue delivering robust growth.
Zynga has amassed an impressive collection of bankable game titles and development studios capable of delivering new content that can drive engagement and extend product life cycles, and its solid balance sheet means that it could pursue more buyouts. In the wake of Electronic Arts' deal to buy Glu Mobile, some analysts also believe that Zynga itself could be bought out by a larger tech player.
With valuations for technology stocks recently seeing volatile swings, the hot market for game company buyouts could help Zynga shares hold up even if the rest of the sector is hit by more intense sell-offs. The publisher also still has big room for growth if it remains independent through the next decade and beyond. Either way, Zynga's stock offers an intriguing opportunity.